CHAPTER 11: DESIGNING AND IMPLEMENTING BRANDING STRATEGIES Kevin Lane Keller Tuck School of Business Dartmouth College

Branding strategy Branding strategy is critical because it is the means by which the firm can help consumers understand its products and services and organize them in their minds. Two important strategic tools: The brand-product matrix and the brand hierarchy help to characterize and formulate branding strategies by defining various relationships among brands and products.

Branding Strategy or Brand Architecture The branding strategy for a firm reflects the number and nature of common or distinctive brand elements applied to the different products sold by the firm. Which brand elements can be applied to which products and the nature of new and existing brand elements to be applied to new products

The role of Brand Architecture Clarify: brand awareness Improve consumer understanding and communicate similarity and differences between individual products Motivate: brand image Maximize transfer of equity to/from the brand to individual products to improve trial and repeat purchase

Brand-Product Matrix Must define: 1 2 3 4 A B C Products Brands Brand-Product relationships (rows) Line and category extensions Product-Brand relationships (columns) Brand portfolio 71

Important Definitions Product line A group pf products within a product category that are closely related Product mix (product assortment) The set of all product lines and items that a particular seller makes available to buyers Brand mix (brand assortment) The set of all brand lines that a particular seller makes available to buyers 66

Breadth of a Branding Strategy Breadth of product mix Aggregate market factors Category factors Environmental factors Depth of product mix Examining the percentage of sales and profits contributed by each item in the product line Deciding to increase the length of the product line by adding new variants or items typically expands market coverage and therefore market share but also increases costs 66

Depth of a Branding Strategy The number and nature of different brands marketed in the product class sold by a firm Referred to as brand portfolio The reason is to pursue different market segments, different channels of distribution, or different geographic boundaries Maximize market coverage and minimize brand overlap 66

Ford Brand Portfolio 66

Designing a Brand Portfolio Basic principles: Maximize market coverage so that no potential customers are being ignored Minimize brand overlap so that brands aren’t competing among themselves to gain the same customer’s approval

Brand Roles in the Portfolio Flankers Cash cows Low-end entry-level High-end prestige brands 66

Brand Hierarchy A means of summarizing the branding strategy by displaying the number and nature of common and distinctive brand elements across the firm’s products, revealing the explicit ordering of brand elements A useful means of graphically portraying a firm’s branding strategy 66

Brand Hierarchy Tree: Toyota Corporation Toyota (SUV/vans) Toyota (Cars) Toyota Financial Services Toyota (Trucks) Lexus MR2 Spyder Corolla Camry Avalon Celica ECHO Matrix Prius Platinum Edition XL XLS CE S LE SE LE XLE SE SLE

Brand Hierarchy Levels Corporate Brand (General Motors) Family Brand (Buick) Individual Brand (Park Avenue) Modifier: Item or Model (Ultra) 65

Corporate Brand Equity Occurs when relevant constituents hold strong, favorable, and unique associations about the corporate brand in memory Encompasses a much wider range of associations than a product brand 66

Family Brands Brands applied across a range of product categories An efficient means to link common associations to multiple but distinct products 66

Individual Brands Restricted to essentially one product category There may be multiple product types offered on the basis of different models, package sizes, flavors, etc. 66

Modifiers Signals refinements or differences in the brand related to factors such as quality levels, attributes, functions, etc. Plays an important organizing role in communicating how different products within a category that share the same brand name are 66

Corporate Image Dimensions Corporate product attributes, benefits or attitudes Quality Innovativeness People and relationships Customer orientation Values and programs Concern with the environment Social responsibility Corporate credibility Expertise Trustworthiness Likability 66

Brand Hierarchy Decisions The number of levels of the hierarchy to use in general How brand elements from different levels of the hierarchy are combined, if at all, for any one particular product How any one brand element is linked, if at all, to multiple products Desired brand awareness and image at each level 66

Number of Hierarchy Levels Principle of simplicity Employ as few levels as possible Principle of clarity Logic and relationship of all brand elements employed must be obvious and transparent

Levels of Awareness and Associations Principle of relevance Create global associations that are relevant across as many individual items as possible Principle of differentiation Differentiate individual items and brands

Linking Brands at Different Levels Principle of prominence The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products

Linking Brands Across Products Principle of commonality The more common elements shared by products, the stronger the linkages

Brand Architecture Guidelines Adopt a strong customer focus Avoid over-branding Establish rules and conventions and be disciplined Create broad, robust brand platforms Selectively employ sub-brands as means of complementing and strengthening brands Selectively extend brands to establish new brand equity and enhance existing brand equity

Corporate Brand Campaign Different objectives are possible: Build awareness of the company and the nature of its business Create favorable attitudes and perceptions of company credibility Link beliefs that can be leveraged by product-specific marketing Make a favorable impression on the financial community Motivate present employees and attract better recruits Influence public opinion on issues

Using Cause Marketing to Build Brand Equity The process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives 66

Advantages of Cause Marketing Building brand awareness Enhancing brand image Establishing brand credibility Evoking brand feelings Creating a sense of brand community Eliciting brand engagement 66

Green Marketing A special case of cause marketing that is particularly concerned with the environment Explosion of environmentally friendly products and marketing programs 66

Crisis Marketing Guidelines The two keys to effectively managing a crisis are that the firm’s response should be swift and that it should be sincere.